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TSLA, QS & LAD: Can These Auto Stocks Beat Q3 Earnings Estimates?
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Key Takeaways
Tesla, Lithia Motors and QuantumScape face uncertain Q3 earnings prospects amid mixed auto market trends.
TSLA's Q3 deliveries fell 2.1% year over year. Higher costs could slash operating income by over 68%.
LAD faces rising costs and a projected 7% operating income drop, while QS remains pre-revenue under U.S. GAAP.
The third-quarter earnings season for the Auto-Tires-Trucks sector kicks off today. Despite rising affordability pressures, the U.S. auto market has remained relatively resilient, supported by fleet purchases and demand from higher-income buyers. Easier access to credit has also helped cushion the impact of persistent inflation and weak consumer confidence.
Per the Earnings Outlook report dated Oct. 14, the auto sector’s earnings and revenues for third-quarter 2026 are expected to grow 3.4% and 0.6%, respectively, on a year-over-year basis.
Electric vehicle (EV) and tech giant Tesla (TSLA - Free Report) , leading auto retailer Lithia Motors (LAD - Free Report) and EV battery maker QuantumScape Corp. (QS - Free Report) are scheduled to report third-quarter results tomorrow. Before we discuss how these companies are expected to fare this time, let’s take a look at the broader factors shaping the quarterly performance of the auto sector.
Factors at Play
The U.S. auto market continued to show resilience despite affordability pressures. New-vehicle sales declined 0.7% year over year to roughly 4.12 million units in the third quarter, per Cox Automotive. For the first nine months of 2026, sales fell about 2% to 12.06 million units. High fuel prices, persistent inflation and rising living costs have been weighing on household budgets, yet demand has held up better than expected.
However, the strength is not evenly distributed. Kelley Blue Book reported that the average transaction price of a new vehicle rose for the fourth consecutive month in September to $50,562, approaching the record of $50,614 set in December 2025. This price environment is increasingly pushing budget-conscious buyers out of the new-car market, while wealthier consumers continue to support sales. Greater access to credit is also helping sustain demand.
Fleet purchases are providing another important source of support. They accounted for 20% of U.S. vehicle sales during the first nine months, with government and rental purchases increasing 7%. In contrast, retail sales to individual consumers declined 5%, highlighting the growing importance of fleet demand in offsetting weakness in the consumer market.
Electric vehicles have also held up better than expected. U.S. EV sales reached 262,649 units in the third quarter, up 6.1% sequentially and marking their strongest quarterly showing since the third quarter of 2025. However, sales remained 39.5% below the year-ago level. That’s a tough comparison period when buyers rushed to purchase EVs ahead of the expiration of federal incentives.
What’s in Store for LAD, QS and TSLA?
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lithia Motors is set to report earnings before market opens. Our proven model does not predict an earnings beat for LAD this time, as the stock has an Earnings ESP of +1.03% and a Zacks Rank #4 (Sell) at present.
Our model estimates Lithia Motors’ revenues from new and used vehicle sales to be $4.7 billion and $3.52 billion, implying a contraction of 1.7% and an uptick of 1.7%, respectively, on a year-over-year basis. Amid a projected increase in cost of revenues and SG&A expenses, we expect the company’s adjusted operating income to decline approximately 7% in the to-be-reported quarter.
The Zacks Consensus Estimate for LAD’s to-be-reported quarter’s earnings and revenues is pegged at $9.70 per share (implying growth of 2.1% on a year-over-year basis) and $9.71 billion (suggesting a year-over-year uptick of 0.4%), respectively. The EPS estimate for the third quarter has moved south by 3 cents in the past seven days. Lithia Motors surpassed earnings estimates thrice in the trailing four quarters and missed once.
QuantumScape is set to report earnings after the closing bell. Our proven model does not conclusively predict an earnings beat for QS this time, as the stock has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
QuantumScape remains pre-revenue under U.S. GAAP. The company’s second-quarter 2026 billings were $10.8 million, bringing first-half billings to $21.8 million, but QuantumScape has specified that the metric is not a substitute for revenues. Meanwhile, QS continues to incur sizable expenses while developing products and scaling pilot manufacturing. Profitability therefore remains dependent on future technology transfer and partner manufacturing.
The Zacks Consensus Estimate for QS’ to-be-reported quarter’s loss per share is pegged at 18 cents. It has remained unchanged for the past 60 days. QuantumScape surpassed earnings estimates twice in the trailing four quarters, matched once and missed on the other.
Tesla is set to report earnings after market closes. Our proven model does not predict an earnings beat for TSLA this time, as the stock has an Earnings ESP of -7.19% and a Zacks Rank #4 at present.
Tesla delivered 486,532 vehicles (comprising 478,237 units of Model 3/Y and 8,295 Other models) in the third quarter of 2026, up 1.3% sequentially. However, the deliveries missed our model estimate of 494,446 units and also declined 2.1% on a year-over-year basis. We also expect Tesla’s total operating income to decline more than 68% due to higher cost of revenues, R&D and SG&A expenses. Spending related to AI, Cybercab, Optimus and Tesla Semi is likely to have impacted operating results and pressured free cash flow.
The Zacks Consensus Estimate for TSLA’s to-be-reported quarter’s earnings and revenues is pegged at 44 cents per share (implying a decline of 12% on a year-over-year basis) and $27.78 billion (suggesting a year-over-year contraction of 1.12%), respectively. The EPS estimate for the third quarter has moved north by a cent in the past seven days. Tesla surpassed earnings estimates twice in the trailing four quarters for as many misses.
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TSLA, QS & LAD: Can These Auto Stocks Beat Q3 Earnings Estimates?
Key Takeaways
The third-quarter earnings season for the Auto-Tires-Trucks sector kicks off today. Despite rising affordability pressures, the U.S. auto market has remained relatively resilient, supported by fleet purchases and demand from higher-income buyers. Easier access to credit has also helped cushion the impact of persistent inflation and weak consumer confidence.
Per the Earnings Outlook report dated Oct. 14, the auto sector’s earnings and revenues for third-quarter 2026 are expected to grow 3.4% and 0.6%, respectively, on a year-over-year basis.
Electric vehicle (EV) and tech giant Tesla (TSLA - Free Report) , leading auto retailer Lithia Motors (LAD - Free Report) and EV battery maker QuantumScape Corp. (QS - Free Report) are scheduled to report third-quarter results tomorrow. Before we discuss how these companies are expected to fare this time, let’s take a look at the broader factors shaping the quarterly performance of the auto sector.
Factors at Play
The U.S. auto market continued to show resilience despite affordability pressures. New-vehicle sales declined 0.7% year over year to roughly 4.12 million units in the third quarter, per Cox Automotive. For the first nine months of 2026, sales fell about 2% to 12.06 million units. High fuel prices, persistent inflation and rising living costs have been weighing on household budgets, yet demand has held up better than expected.
However, the strength is not evenly distributed. Kelley Blue Book reported that the average transaction price of a new vehicle rose for the fourth consecutive month in September to $50,562, approaching the record of $50,614 set in December 2025. This price environment is increasingly pushing budget-conscious buyers out of the new-car market, while wealthier consumers continue to support sales. Greater access to credit is also helping sustain demand.
Fleet purchases are providing another important source of support. They accounted for 20% of U.S. vehicle sales during the first nine months, with government and rental purchases increasing 7%. In contrast, retail sales to individual consumers declined 5%, highlighting the growing importance of fleet demand in offsetting weakness in the consumer market.
Electric vehicles have also held up better than expected. U.S. EV sales reached 262,649 units in the third quarter, up 6.1% sequentially and marking their strongest quarterly showing since the third quarter of 2025. However, sales remained 39.5% below the year-ago level. That’s a tough comparison period when buyers rushed to purchase EVs ahead of the expiration of federal incentives.
What’s in Store for LAD, QS and TSLA?
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Lithia Motors is set to report earnings before market opens. Our proven model does not predict an earnings beat for LAD this time, as the stock has an Earnings ESP of +1.03% and a Zacks Rank #4 (Sell) at present.
Our model estimates Lithia Motors’ revenues from new and used vehicle sales to be $4.7 billion and $3.52 billion, implying a contraction of 1.7% and an uptick of 1.7%, respectively, on a year-over-year basis. Amid a projected increase in cost of revenues and SG&A expenses, we expect the company’s adjusted operating income to decline approximately 7% in the to-be-reported quarter.
The Zacks Consensus Estimate for LAD’s to-be-reported quarter’s earnings and revenues is pegged at $9.70 per share (implying growth of 2.1% on a year-over-year basis) and $9.71 billion (suggesting a year-over-year uptick of 0.4%), respectively. The EPS estimate for the third quarter has moved south by 3 cents in the past seven days. Lithia Motors surpassed earnings estimates thrice in the trailing four quarters and missed once.
Lithia Motors, Inc. Price and EPS Surprise
Lithia Motors, Inc. price-eps-surprise | Lithia Motors, Inc. Quote
QuantumScape is set to report earnings after the closing bell. Our proven model does not conclusively predict an earnings beat for QS this time, as the stock has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
QuantumScape remains pre-revenue under U.S. GAAP. The company’s second-quarter 2026 billings were $10.8 million, bringing first-half billings to $21.8 million, but QuantumScape has specified that the metric is not a substitute for revenues. Meanwhile, QS continues to incur sizable expenses while developing products and scaling pilot manufacturing. Profitability therefore remains dependent on future technology transfer and partner manufacturing.
The Zacks Consensus Estimate for QS’ to-be-reported quarter’s loss per share is pegged at 18 cents. It has remained unchanged for the past 60 days. QuantumScape surpassed earnings estimates twice in the trailing four quarters, matched once and missed on the other.
QuantumScape Corporation Price and EPS Surprise
QuantumScape Corporation price-eps-surprise | QuantumScape Corporation Quote
Tesla is set to report earnings after market closes. Our proven model does not predict an earnings beat for TSLA this time, as the stock has an Earnings ESP of -7.19% and a Zacks Rank #4 at present.
Tesla delivered 486,532 vehicles (comprising 478,237 units of Model 3/Y and 8,295 Other models) in the third quarter of 2026, up 1.3% sequentially. However, the deliveries missed our model estimate of 494,446 units and also declined 2.1% on a year-over-year basis. We also expect Tesla’s total operating income to decline more than 68% due to higher cost of revenues, R&D and SG&A expenses. Spending related to AI, Cybercab, Optimus and Tesla Semi is likely to have impacted operating results and pressured free cash flow.
The Zacks Consensus Estimate for TSLA’s to-be-reported quarter’s earnings and revenues is pegged at 44 cents per share (implying a decline of 12% on a year-over-year basis) and $27.78 billion (suggesting a year-over-year contraction of 1.12%), respectively. The EPS estimate for the third quarter has moved north by a cent in the past seven days. Tesla surpassed earnings estimates twice in the trailing four quarters for as many misses.
Tesla, Inc. Price and EPS Surprise
Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote